Airbus A380: A white elephant?

PARIS: Airbus delivers its first A380 superjumbo jet on Monday, but beyond the hype about the size of the world's biggest passenger jet some analysts doubt that the aircraft will ever make money.

A sense of euphoria is expected at Airbus headquarters in southern France on Monday as the first doubledecker is delivered to launch client Singapore Airlines at a ceremony attended by 500 guests and the world's media.

Airbus and its 57,000 employees can be forgiven for their elation -- the heat has been on since manufacturing problems caused three successive slips in the production schedule, meaning the delivery is 18 months late.

Production of the plane has been a debacle, severely damaging Airbus's reputation with clients, causing billions of euros of losses and laying bare the difficulties of industrial cooperation at the French-German group.

"It is something to celebrate when you launch a new airplane and get it turned over to a client, but this has been a very difficult delivery," says US-based analyst John Nance, a respected author and commentator on the aviation industry.

"The troubles will resonate for some time. I think it'll be three to four years before they've climbed away from the difficulties caused by this plane."

He went on to question, as have a number of other analysts, whether the A380 programme would ever make a return for Airbus parent group EADS, which faces cost overruns of 6.0 billion dollars (4.2 billion euros) because of delays.

"I'm sure she'll fly well and it's a magnificent achievement, but I think it's a white elephant. I doubt that the world's airlines are going to flock to this airplane," he said.

Capable of carrying from 525 to more than 800 passengers in its doubledecker body, the A380 is Airbus's most ambitious project to date but is based on a strategy that had its doubters from the beginning.

It was conceived to satisfy expected demand from two types of airline: those operating from hub airports such as Dubai, Singapore or London, and others that have limited take-off slots at crowded airports and want to maximise capacity.

Airbus has slightly fewer than 200 firm orders and preliminary sales agreements for the A380, but the group has said this figure must more than double for the project to be profitable.

Due to the delays and cost overruns, Airbus needs to sell 420 A380s at catalogue prices to cover its costs -- up from 270 when the programme was launched in 2000.

Given that catalogue prices are discounted, the final sales figure needed for breakeven will be even higher than this.

David Bentley, a European analyst for the Centre for Asia Pacific Aviation, told AFP: "Will it make money? The prospects do not look good."

Airbus has marketed the A380 as the most cost-effective solution in the market, counting on the attraction of size and the reduced costs per passenger.

Arch-rival Boeing has taken another route while continuing to produce the world's best-known jumbo jet, the 37-year-old B-747.

Boeing has put its energies into developing a midsized plane called the 787 Dreamliner that will fly long distances from point-to-point directly and can land in most airports -- unlike the A380 which requires modified runways.

Although Boeing announced production problems with the 787 last week and a six-month delay to deliveries, the US-based group has had more than 600 orders for the new product even before a test flight.

Airbus is to launch a rival to the 787, the A350, but it will reach the market at least five years later than the Boeing plane.

"The A380 is a game-changer because of its size: the question is, does the market really desire this?" said the managing director of US-based consultancy International Aviation Advisors, William Loh.

Bentley wondered whether the focus on size -- the A380 can carry a third more passengers than a Boeing 747 jumbo and has 50 percent more floorspace -- was correct.

"Speed is passe, it's so yesterday. I wonder whether size will be the next thing," he says. "It's all about greenness nowadays."

The best scenario for Airbus is that the A380 takes to the skies and makes an impression.

"Airlines tend to be wait-and-see organisations, so the fact that there will be airplanes in service building up a source of data might push the fence-sitters to do what they're going to do, one way or the other," said Loh.

The first commercial flight of the A380 with Singapore Airlines will take place on October 25 on a Singapore-Sydney route.

Tickets for the flight were sold on Internet auction website eBay, raising 1.3 million dollars for charity.